prpri Section 198 Tax Deducted at Source shall be deemed to be income received Section 198 Tax Deducted at Source shall be deemed to be income received

Extract of Section 198 of Income Tax Act, 1961

Section 198 Tax Deducted at Source shall be deemed to be income received

198. All sums deducted in accordance with the foregoing provisions of this Chapter shall, for the purpose of computing the income of an assessee, be deemed to be income received :

Provided that the sum being the tax paid, under sub-section (1A) of section 192 for the purpose of computing the income of an assessee, shall not be deemed to be income received:

[Provided further that the sum deducted in accordance with the provisions of section 194N for the purpose of computing the income of an assessee, shall not be deemed to be income received.

Section 198

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Tax deducted at source shall be deemed to be income received. Accordingly, it shall be considered for the purpose of computing the income of assessee.

E.g. Mr. C received interest of ₹ 54,000/- after deduction of ₹ 6,000/- as TDS. The income of Mr. C will be ₹ 60,000/- i.e including the portion of TDS.

However in the following two cases, Tax deducted will not form part of income-

  • TDS contributed by the employer on non-monetary perquisites provided to employee u/s 192(1A).
  • TDS deducted by banks, post offices, cooperative banks u/s 194N
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